METHOD
Summary of best planning practices
20/04/2023
Reading time: 3min
Why plan?
Planning is an essential activity in industrial operations. A good planning system improves service rates, allows for confidently entering new markets, boosts productivity while reducing stock levels.
Good planning, therefore, enhances the 3 pillars of a company's performance (throughput, costs, stock) presented by Eliyahu M. Goldratt in the Best Seller of manufacturing “The Goal”.
When to plan?
To establish the right production strategy, it is necessary to implement decision-making routines that define plans over different horizons:
Long term with the S&OP (Sales and Operations Planning)
Medium term with the PDP (Master Production Schedule)
Short term with Scheduling
Here is a brief summary of the challenges and best practices for each of these horizons.
PIC - Industrial and Commercial Plan
Horizon : 6 months to 5 years
Who must be present:
The Industrial Director
The Sales Director
The Operations Director
The Supply Chain Director
The Master Planner
Data provided:
Sales history, commercial strategy, sales forecasts, architecture of the industrial system.
Exercise objectives:
Obtain a consolidated view of the forecasted demand, make investment or disinvestment decisions.
Example of decisions made:
Industrial investment in a new production line, increasing commercial efforts on a market segment (region, product, type of customer).
❌ Some classic mistakes to avoid:
Create a model that is too complex, understood only by one or several people.
✅ Best practices for going further:
Validate the main assumptions with each contributor/stakeholder in advance of the meeting.
Prepare in advance the thinking on the remaining 2/3 key decisions.
PDP - Master Production Schedule
Horizon : 12 weeks to 12 months
Who should be present:
The Production Director
The Sector Managers
The Supply Chain Director
The Planner
The Scheduler
Data provided:
Actual customer requests (firm and forecasted), the upcoming availability of personnel and machinery, the initial stock levels.
Objectives of the exercise:
Establish a forecasted resource allocation plan.
Examples of decisions made and information collected:
The hiring of a temporary worker, the relocation of a resource, the outsourcing of an operation or product, the postponement of an order, the risk of stockouts on a product.
❌ Some classic mistakes to avoid:
Confusing workload-capacity balance and scheduling. The goal of workload-capacity balance is to answer the question “does it fit or not?” and not “in what order does it fit?”.
Not involving production. They are the ones who know the constraints of the workshop (absences, ongoing work, machine problems).
✅ Best practices to go further:
Compare the planned capacity to the demonstrated capacity that represents the historical throughput observed in the workshop. This often helps avoid being overly optimistic.
Scheduling
Horizon: 1 to 4 weeks
Who should be present:
The Scheduler
The Workshop Leader or the Sector Manager
Data provided:
The list of needs to be met (OFs), the levels of priorities, the availability of production resources (operator, raw materials, tools, machines).
Objectives of the exercise:
Establish a production schedule for the coming days/weeks.
Example of decisions made:
Transfer an OF from one machine to another, group certain OFs to maximize production, reassign operators.
❌ Common mistakes to avoid:
Final scheduling should only be done on the few bottleneck stations in the workshop. Non-bottleneck stations can be managed according to queue management methodologies (e.g., FIFO, conwip, polka).
Use the same visual to create the plan and communicate it to the workshops. The scheduler and the workshop have very different roles and work in different environments as well (fixed PC vs. workshop). Therefore, they do not have the same visualization needs.
✅ Best practices for going further:
Have a simple and visual display of priorities.
Establish a fixed horizon on which the priorities are set.
Give some autonomy to the workshop to adjust production based on their experience.
